How Advisory Boards are Helping Technology Companies Stay Ahead of the Curve

There has been an increased appetite for non-tech businesses to establish technology Advisory Boards to drive digitisation. In tandem, technology companies have been setting up Advisory Boards with a different purpose: to achieve greater scale, increase market penetration and equip their go-to-market organisation with the strategic tools to win new clients.

But what exactly is an Advisory Board?

Typically, an Advisory Board is made up of senior executives from industry, quite often former CEOs of large corporates who have been, at one point in time, a major buyer of technology solutions.

What can Advisory Boards do for tech companies?

Offering external perspective, Advisory Boards help companies look at problems ‘from the other side of the table.’ This experience can be useful in convincing organisations to invest heavily in new technology spend, which has an inevitable impact on people, existing IT systems and business processes.

Advisory Board members, who have previously led organisations of scale and been at the top of the decision pyramid, understand the impact of such investment and possess unique expertise and insight.

Having once been the ultimate decision maker and witnessed the impact of technology investment, both good and bad, they are well positioned to coach others on the appropriate business narrative, value proposition and ROI which can be the difference in winning or losing major deals.

How do they add value?

Different to a typical non-executive board, an Advisory Board is not purely advisory.

Therefore, clearly defining the purpose of the Advisory Board at the point of its creation is critical, and defining tangible metrics aligned to business outcomes is the most important metric of them all.

An Advisory Board is seen as making a positive impact when it advances the organisation in ways which everyone can see and feel, and typically this is revenue. Often, an Advisory Board member’s greatest contribution is supporting the tech company’s go-to-market organisation to become more effective in customer deal situations, and ultimately growing revenue.

Many of the most successful west coast technology companies have built their own global and regional Advisory Boards to help improve win-rates and drive customer engagement.

For some global organisations it would make sense to set up local Advisory Boards in countries like Japan, where developing executive relations with large domestic companies can be of significant benefit with regard to initiating or expanding business.

Usually, Advisory Board members are former CEOs with expertise in the key industries the company operates in, such as Financial Services, Manufacturing, Big Pharma etc. This sector-specific knowledge can then be used by tech companies for coaching on major deals, or to help refine the solution strategy and sales narrative.

They help define the business outcomes and position the technology vendor in a way that a CEO will see the real value in the investment – they do it because they were once the ones on the other side of the table being sold to.

Getting the construct of an Advisory Board right is critical

• Typically, these boards are small and specialist, with a maximum of c.8 leaders in total.
• These non-executives work on a part time basis (c. 1-2 days per month), for a fixed term of every 12 to 24 months, when cycles renew. Having short tenure allows members to achieve specific clear goals.
• Usually, the Advisory Boards are made up of former CEOs and they aligned to specific sectors relevant to their own career background.
• As a business reaches scale, Advisory Boards become regionally focused meaning a major tech company can have North American, EMEA and APAC Advisory Boards.

Things to consider when setting up an Advisory Board

• Measuring success: The Advisory Board, if not chaired well, can quickly become a talking shop. So, the need for defined KPIs is essential and putting firm commercials in place helps to ensure this situation is avoided. Testing board members for influence and impact at the end of an annual cycle is advised.
• Clarity of vision: Being disciplined in how the Advisory Board is used ensures the best results. It is advised to have a clear purpose; making sure they are engaged on activities that have real value (rather than attending company events).
• Leveraging network: It is advisable to set the expectation that Advisory Boards members must be willing to monetise their network and open it up for introductions, this could be set in the job specification. You should be certain board members have a relevant network, have a network they can influence and be happy to monetise their network.
• Linking to revenue goals: It can be valuable to ensure Board Members attend sales kick off. Given the link to commercial output, the company Chief Revenue Officer could be the best Chair and should be committed to driving output.
• Structure & size: There should be a Vice Chair appointed to the Advisory Board who is fully committed to making the whole initiative a success. The Advisory Board also needs a full-time, dedicated administrator/coordinator to manage the workload. Adding too many members, can be too unwieldy, more than 6-8 members is hard to manage.
• Commitment: Ensuring that Board Members are aware of the commitment expectations regarding time in exchange for financial reward.
• Financials: Financials are dependent on the set purpose of the Advisory Board, however if the board is set up with a sense of KPIs in mind, this will denote a higher remuneration. Depending on business size and structure, stock can be made available for delivering results, rather than just for board participation.

From large scale vendors, as well as smaller PE or VC backed businesses our Global Technology & IT Services Practice is equipped to help you define your board’s core objectives.

If you are interested in setting up and defining your own Advisory Board, follow the links below to reach out to our Technology Practice or get in touch with your local Odgers Berndtson office.